This Morning: QCOM’s Got Competition, Survey Props AAPL, Dumps RIMM

By Tiernan Ray

Here are some things going on this morning in your world of tech:

This continues to be a season to reasses wireless chip maker Qualcomm (QCOM) as D.A. Davidson’s Aalok Shah cut his rating on the stock to Neutral from Buy and cut his price target to $65 from $70, arguing competitors may steal share in baseband processors.

After having an early advantage in “long term evolution,” or LTE, baseband processors, writes e believe competition is ramping in both the high and low end spectrum. We believe Intel (INTC) will launch its Infineon-based LTE baseband this quarter. In the app processor segment, Nvidia’s (NVDA) Tegra 3 quad-core SoC has won several designs in the tablet market and a few in the smartphone market.”

Speaking of wireless, James Faucette of Pacific Crest this morning offers several notes on his survey of handset sell-through patterns. In particular, he finds very good sell-through patterns for Apple‘s (AAPL) iPhone and Samsung Electronics‘s (005930KS) Galaxy S III.

“We said the new iPhone was going to be huge, and it was,” writes Faucette. “In addition to finding very strong demand for Apple’s latest iPhone refresh, we believe the improved pricing for legacy iPhone products proved to be a meaningful driver. In particular, we believe that the 8 Gb iPhone 4 for $0.99 attracted a meaningful number of new smartphone users.”

Apple shares this morning are rebounding from a nearly 10% sell-off in recent weeks, rising $7.75, or 1.2%, to $643.60.

Faucette also has some harsh words for Research in Motion (RIMM): “Don’t be fooled by channel fill,” he writes, “Our checks found inventory levels in the U.K. that were roughly double at the end of September versus the prior one-to-two months, with days of inventory also rising. We believe the company took the opportunity to fill the chan- nel late in the August quarter, which was a meaningful driver of last quarter’s upside.”

Research in Motion shares this morning are down 7 cents, or 0.8%, at $7.73.

While we’re on the subject of surveys, Piper Jaffray‘s Gene Munster last night published the results of his survey of 7,700 teens, finding evidence for expansion of ownership of Apple’s products among the youth set. “According to our data, 40% of teens own an iPhone,” writes Munster.

“Additionally, 44% of teens own a tablet computer with iPad making up 72% of total tablet ownership. We believe that the launch of the smaller iPad could eventually increase iPad ownership among younger users.”

In case you missed it, Reuters’s Bill Rigbythis morning writes that Microsoft (MSFT) CEO Steve Ballmer‘s letter to shareholders this morning reveals the company is looking to become more like Apple in terms of adding hardware devices of its own and host more cloud-based services.

As Ballmer tells investors, “This is a significant shift, both in what we do and how we see ourselves — as a devices and services company.”

Also of interest this morning, Bloomberg‘s Tim Culpanreports that Apple has experienced shortages of the iPhone 5 as it has had to negotiate with supplier Foxconn Technology more strict quality control for the production of the device after complaints of nicks and scratches showing up on brand new units. Writes Culpan, citing a single anonymous source, “Senior Apple managers told executives at Foxconn near the end of September to tighten production standards.”

There are 14 comments

He even might have found one or two stockers that actually went up, and so he could write his little note, but in the end who's fooling who?

OCTOBER 10, 2012 11:24 A.M.

TeamLead wrote:

I"n case you missed it, Reuters’s Bill Rigby this morning writes that Microsoft (MSFT) CEO Steve Ballmer‘s letter to shareholders this morning reveals the company is looking to become more like Apple (AAPL) in terms of adding hardware devices of its own and host more cloud-based services."

Sounds good, but I only see one problem with it and that is Steve Ballmer

OCTOBER 10, 2012 11:28 A.M.

Hey crackhead wrote:

Always looking for cracks when it comes to rim, why not take the nit picker approach to apple or better yet to last weeks unemployment number, you might not want to go there, it could cost you everything. Keep killing it and hopefully it will kill you too.

OCTOBER 10, 2012 12:00 P.M.

JM wrote:

Tech Trader Daily, with the actionable word **trader**.

Thanks for your assistance in aiding the QCOM manipulators to the disadvantage of serious investors (LTBH). No wonder the retail investors keep leaving the market in droves, many of which will never return because of HFT / traders / manipulators and the games (casino) they continue to play.

JM

OCTOBER 10, 2012 1:31 P.M.

james wrote:

As people and organizations continue to ditch Rim two things happen. First, Rim unsellable junk pile up through the warehouse roofs; Second, Rim BOGO junk are flatly given away to any unwary takers, usually the unwary folks of the undeveloped regions.

Good article, factual and well presented.

OCTOBER 10, 2012 2:21 P.M.

Roger Quesada wrote:

Qualcomm treats investors as pawns. Over the past five years the stock has hovered at an average rate of 55. There has been no increase in the stock while management has made millions!!!

OCTOBER 10, 2012 2:33 P.M.

Henry 3 Dogg wrote:

Who's going to use Infineon/Intel chips with the expectation that your SEP licences may get pulled after you go into production?

You'd be mad!

OCTOBER 10, 2012 2:36 P.M.

Henry 3 Dogg wrote:

"...Steve Ballmer‘s letter to shareholders this morning reveals the company is looking to become more like Apple in terms of adding hardware devices..."

Bring back the Kin

OCTOBER 10, 2012 2:39 P.M.

Bill wrote:

Apple and Cook need to come out of their caves and give the shareholders a morsel of positive news. Whoever runs Apple's IR and PR departments should be fired for incompetency

OCTOBER 10, 2012 2:57 P.M.

freddysrenvg wrote:

Once again, let's all practice our new "talking point" - all together now..... "Can you believe that AAPL missed it's numbers for the 3rd quarter in a row"????

Get used to hearing that ....

OCTOBER 10, 2012 3:04 P.M.

Just wondering... Re RIM. wrote:

Inventory levels doubled end of September. What he's saying is RIM almost made up the units number because they wanted to create or deplending how you want to look at it, destroy perception. Expected. But what hocus locus could they have done to get that extra $100 million? Opinions?

OCTOBER 10, 2012 3:56 P.M.

Ed wrote:

Apple stock BLOWS!

OCTOBER 10, 2012 4:47 P.M.

@ freddysrvng wrote:

Numbers? What are you talking about. You don't use numbers. You're just a spammer. By the way. How come you stopped writting mouth loving comments about Thorsten? They were good. You're the last RIM fan and shill kneeling.

OCTOBER 14, 2012 12:11 P.M.

@freddysrvng wrote:

"Numbers? What are you talking about. You don’t use numbers. You’re just a spammer. By the way. How come you stopped writting mouth loving comments about Thorsten? They were good. You’re the last RIM fan and shill kneeling."

Yeah, I was wondering what's happened to Freddy and his beloved RIM...LMAO

About Tech Trader Daily

Tech Trader Daily is a blog on technology investing written by Barron’s veteran Tiernan Ray. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields. Comments and tips can be sent to: techtraderdaily@barrons.com.